How to Write a Statement of Work: A Step-by-Step Guide
by YOSS Community Writer, on January 9, 2020 at 12:33 PM
A statement of work (SoW) is an important project management tool to use when working with flexible talent. It is normally part of a contract that describes the work that will be done along with details like costs.
Why You Should Create a Statement of Work
Not all businesses and freelancers use SoWs, which may seem like busy work, especially for those trying to reduce paperwork. If you do work with flexible talent, however, SoWs are essential for several different reasons.
Most important, an SoW clarifies expectations for all parties in a contract and thus reduces the possibility that anyone will be disappointed.
There are various aspects of this. Most of all, everyone needs to agree on what work is being done. That may seem obvious, but it often isn't. Freelancers may come from different industries and have their own ideas that aren't consistent with yours. It's easy to talk past each other in conversations.
Another good reason for creating an SoW is that it provides you with clarity about the project. The process of writing an SoW requires you to be concrete about what exactly the project is and what you expect to get out of it.
When You Should Create a Statement of Work
An SoW needs to be done before work is started, usually for use with the contract. Waiting until later defeats most of the benefits of having one in place. It's generally helpful to have at least a draft SOW prepared before requesting quotes so you can include it and reduce the flow of unqualified and inappropriate responses. The writing process will also clarify the project and make the resulting contract more accurate.
How to Create a Statement of Work Template
Let’s now take a look at the steps it takes to create an SOW template so that you can have one on hand for every project. Note that any SoW will probably need to be updated as time goes on. Exactly how much will depend upon how clear the project is at the beginning.
Here is an overview of an SoW:
- Project description
- Scope of work
Step 1: Collect Project material
Before starting your SoW, you should gather material about the project that you are working on such as goals, costs, timeframe, and so on.
Step 2: Write Your Scope of Work
As seen above, the Scope of Work is not the first thing in the SoW, but it is the core of it. And it isn't really possible to write the rest without it. In this section, you will explain what the freelancer will be doing in detail. It normally has the following sections:
This is the most fundamental part of the Scope of Work: what the freelancer will deliver. This can be anything from an upgraded QA process to a remodelled break room to a new CRM system. You have to be detailed here. There is quite a difference between simply buying a Zoho CRM license and actually integrating it with your business.
Deliverables may also include things beyond the project outputs. For example, many businesses request reports about the work done, so these need to be included.
To determine your deliverables, combine your existing project information with some brainstorming. Come up with everything you may possibly want. You can scale it back based upon your time and financial constraints.
Finally, your list of deliverables will allow you to define what is considered a successful conclusion to the project.
Create a clear list of the work to be done. The deliverables are a good start, but there can still be confusion. That's why it's important to describe the work to be done at the task level.
In general, you don't manage freelancers. They work independently, so this is where you can be clear with them about the approach that should be taken with the work.
All projects need a deadline, which is when the project will be completed. Your schedule could be very complicated for a big project. Each deliverable should be represented as a milestone on your timeline.
Work location is generally up to the freelancer. If some or all of the work needs to be done onsite, this needs to be clear.
Constraints can be limitations or requirements. For example, advanced security measures may reasonably be considered part of hosting a website, but if it isn't, this should be explained in the Scope of Work.
Alternatively, if specific standards must be met, they should be listed. For example, an e-commerce website will need to be PCI compliant in order to safely accept customer payments.
Step 3: Project Description
Now that you have the Scope of Work completed, you should be able to create the project description. This also acts as an introduction to the Statement of Work.
The description explains the purpose of the project, its goals, the timeline, and cost. It also does all of this in a general sense because the details are laid out in the rest of the SoW.
Step 4: Cost/Payment
You must explain the details of payment. Many contracts are paid on delivery, but other forms of payment are also common. This is particularly true of a large or long-term project. For example, payment may be goals-based and linked to milestones, or they may be made on a fixed schedule.
The payment form should also be explained: bank transfer, check, and so on.
Step 5: Reporting/Governance
It's easy to forget, but the reporting relationship between your business and the freelancer is very important. There will always be questions and concerns on both sides. To guarantee good communication, it is critical to have established reporting channels.
Another aspect of this is to allow you to sign-off on the project's milestones. If there is no clear governing structure, there can be disagreements between you and the freelancer regarding the work.
Step 6: Get Feedback
Once the SoW is completed, you should distribute it to all stakeholders. Get their feedback and make any necessary changes.
How to Use a Statement of Work
In this article, we've focused on creating a SoW. This process alone will help you in your project management, but the SoW itself is a valuable project management tool.
You need to understand your SoW very well. That doesn't mean you need to memorize it, but you should know generally what is in it and be able to find any specific information in it quickly.
Once you've done this, you can use it in a number of ways:
- Get continued input from your team and other stakeholders. This can be used to improve the SoW itself but more generally to get others to understand and cooperate with the project.
- Clarify the work and any related matters with the freelancer. Using the SoW during negotiations will make disagreements less likely.
- Call for quotes. The SoW can be used to reach out to those flexible workers who are best for your project.
The SoW (statement of work) is a powerful tool for managing projects with flexible talent. They make projects run smoother and are more than worth the time they require to create.
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